Personal umbrella policy: Your liability safety net

When accidents happen, lawsuits may follow. You can protect your financial assets and future earnings by purchasing a personal umbrella liability policy.

A personal umbrella policy works with your existing insurance to add the extra layer of protection that you may need. After all, you don’t have to be a millionaire to be sued for $1 million.

AUTO

Liability coverage on your auto policy protects you when there is damage or an injury caused by you, a family member or even someone else using your car with your permission. Your auto policy coverage limits could be exhausted in a serious accident; that’s where the umbrella policy steps in.

HOMEOWNER

As a homeowner, your potential for a liability loss is always there: a visitor is injured slipping on your basement steps; your dog bites the neighbor’s two-year-old daughter; or your child’s friend is injured jumping into your swimming pool. You could be presented with some pretty catastrophic medical bills in any of these situations. An umbrella policy would give you that additional layer of protection.

WATERCRAFT

Do you own a boat? Lawsuits have resulted from accidents when skiers are being towed from the insured’s boat and even from another boat. Injuries from these accidents could well exceed the coverage from your watercraft policy.

There are several other features of the umbrella that make it a vital policy to own. An umbrella policy can extend your protection to situations in which you would otherwise not be covered by your underlying policy. The umbrella affords you worldwide coverage.

Most umbrella policies would also protect you if you were sued for libel, slander, defamation or invasion of privacy. You might scoff that any of these scenarios are merely evidence of a lawsuit-happy society. Keep in mind that even if a court ultimately rules that a suit is without merit, you’ll still have defense costs. That in itself can be expensive. Both primary and umbrella policies have the obligation to defend you, even if the suit is determined to be frivolous. The umbrella is an additional layer of coverage for you.